What Are Some Typical CFO Responsibilities?


What Are Some Typical CFO Responsibilities? 

The Chief Financial Officer (CFO) is a senior executive responsible for managing an organization’s financial actions. The CFO is considered a top-level strategist in any business or organization. This professional often works alongside the CEO, president, or even the owner of a company and with the board of directors. CFO responsibilities can range from financial planning and managing cash flow to proposing actions to strengthen the financial health of the business

Top 10 CFO Responsibilities

The CFO acts as the highest finance-related professional in an organization. While most companies have an accounting division, bookkeepers, and other entities that handle financial responsibilities, CFO’s outrank these professionals and divisions and often supervise the tasks they carry out. Below is a look at the top 10 CFO responsibilities.

1. Cash Flow Management 

CFOs manage cash flow throughout the company. This is one of the most important facets of CFO responsibilities, as it revolves around handling and understanding incoming and outgoing funds within the company. CFOs are often tasked with establishing accounting protocols, receiving and disbursing funds and securities, and ensuring the integrity of how funds are used.

2. Monitoring Company Liabilities 

All companies have unique financial liabilities beyond the usual cash flow, and these liabilities can pose significant financial problems when they are not properly handled. The CFO must wholly understand these liabilities and is responsible for ensuring the liabilities are managed. Some of the most common financial liabilities in business include tax obligations, loan covenants, and insurance requirements.

3. Measuring Financial Performance

The CFO uses a keen understanding of the primary business model and numerous tools and insights to keep financial tabs on the company. Using tools like financial statement analyses, operational metrics, and financial performance dashboards, the CFO is responsible for communicating how the company is performing financially, but also how the company should be expected to perform financially going forward.

4. Maintaining Financial Relationships 

Investors, financial analysts, and company shareholders are critical to a business’s financial health. The CFO works alongside CEOs and other C-level officials in the company to maintain these ever-important relationships. Likewise, CFO responsibilities usually involve investing company funds and acting as administrator over company stock options. 

5. Supervising Certain Organization Departments 

In most organizations, the CFO supervises departments directly related to the financial functions of the company, such as accounting and financial departments. Some CFOs also oversee certain aspects of HR (human resources). Specifically, CFOs may be involved when it comes to things like human capital. Human capital involves investing in people for an equitable return or for enhanced growth.

6. Satisfying Financing Requirements 

Raising capital for a company can include several important tasks, such as procuring or negotiating for funding based on equity or maintaining financial arrangements with lenders. The CFO is responsible for planning and coordinating long-term plans to make sure any financing requirements are met as needed.

7. Handling Financial Obligations 

Companies can have a number of financial obligations that must be handled on a rolling basis. A few examples could be satisfying contracts for outsourced services, paying suppliers for raw materials, and settling accounts with vendors. Handling these financial obligations falls within the scope of CFO responsibilities. Some of these tasks may be delegated to accounting. Yet, the CFO oversees these processes to ensure they are adequately addressed.

8. Recording and Reporting Financial Aspects of the Company 

One of the lesser-known CFO responsibilities is efficiently recording and reporting when it comes to company finances. The CFO ensures financial records and reports are both recorded and maintained, ensures internal audits are carried out, and takes care of reporting so compliance standards are met.

9. Handling Relationships with Shareholders 

CFOs are responsible for analyzing the shareholder policies and procedures that affect the company. Likewise, the CFO usually handles drafting the financial reports that must go out to shareholders on an annual or interim basis. If certain shareholder policies, agreements, or procedures need adjustment, the CFO makes the recommendations for these changes to higher people within the company.

10. Overseeing Budgeting and Expenses 

CFOs oversee company budget processes. This may include collecting inputs for expenses and profits, as well as comparing actual financial performance to forecasted performance. Budgeting is a time-consuming process, and certain aspects may be delegated to a bookkeeper or accounting office. However, overseeing these processes is one of the most important CFO responsibilities.

Bring in the Assistance of a Fractional CFO

In order to thrive in modern-day business environments, some organizations need tighter focus on the financial aspects of the business than a single CFO provides. Bringing in a trusted fractional CFO means additional C-level guidance, insight, and management that may support financial success. To find out more about expert fractional CFO services, connect with The A Team.